Social inclusion bonds — EU’s new way to raise money to help refugees displaced by Russia’s war in Ukraine
The Council of Europe Development Bank is raising 1 billion euros ($1.1 billion) of social inclusion bonds to help fund refugee aid. According to Bloomberg, the proceeds will be disbursed quickly to countries taking in large numbers of refugees from Ukraine fleeing the war.
The market for ethical finance has already seen debt deals to help fund nations’ recovery from the global coronavirus pandemic alongside so-called ‘catastrophe’ bonds protecting against events such as volcanic eruptions and global disease outbreaks.
On the same day, April 6, 2022, the Council approved the immediate disbursement of €3.5 billion to EU countries welcoming refugees. The countries which will receive 45% pre-financing are Hungary, Poland, Romania, and Slovakia, which share a border with Ukraine, as well as Austria, Bulgaria, Czechia, Estonia, and Lithuania, which had accommodated a number of displaced persons equivalent to over 1% of their populations.
Ukraine itself has also been raising debt to fund its military resistance to Russia’s invasion. It uses existing government bond auctions to issue ‘war bonds,’ raising about $1.2 billion (mostly in hryvnia) from six weekly auctions, as of April 6, 2022.